Capital gains tax after Budget 2024 — new LTCG and STCG rates with examples
# Capital Gains Tax after Budget 2024 — New LTCG & STCG Rates (With Examples)
## Introduction
Union Budget 2024 brought **major changes in capital gains taxation** in India. The government simplified tax rates, removed indexation benefits in most cases, and increased rates for equity transactions. These changes are applicable **from 23 July 2024 onwards** and impact investors in shares, mutual funds, real estate, gold, etc.
In this blog, we will understand **new LTCG & STCG rates**, key changes, and **practical examples**.
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## 1. What is Capital Gain?
Capital gain arises when you sell a **capital asset** (like shares, property, gold, mutual funds) at a price higher than its purchase cost.
* **Short-Term Capital Gain (STCG)** → Asset held for short period
* **Long-Term Capital Gain (LTCG)** → Asset held for longer period
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## 2. Major Changes in Budget 2024
### ✔ Key Highlights
* LTCG tax rate changed to **12.5% (uniform)**
* STCG on equity increased to **20%**
* **Indexation benefit removed** in most cases
* LTCG exemption on equity increased to **₹1.25 lakh**
* Simplified taxation across asset classes
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## 3. New LTCG Tax Rates (After Budget 2024)
| Asset Type | New LTCG Rate |
| —————————– | ——————————————– |
| Equity Shares / Equity MF | 12.5% (above ₹1.25 lakh) |
| Property / Gold / Others | 12.5% (without indexation) |
| Property (old purchase cases) | Option: 20% with indexation OR 12.5% without |
👉 Earlier: 10% (equity) or 20% (others with indexation)
👉 Now: **Flat 12.5%** (simplified system)
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## 4. New STCG Tax Rates
| Asset Type | New STCG Rate |
| ———————————- | ———————- |
| Equity Shares / Equity MF | 20% |
| Other Assets (property, gold etc.) | As per income tax slab |
👉 Earlier equity STCG was **15%**, now increased to **20%**
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## 5. Important Rule (Date-Based)
* **Before 23 July 2024 → Old rates apply**
* **After 23 July 2024 → New rates apply**
This means taxpayers may need to **split capital gains in ITR**.
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## 6. Examples for Better Understanding
### 🔹 Example 1: LTCG on Shares
* Purchase Price = ₹2,00,000
* Sale Price = ₹4,00,000
* Gain = ₹2,00,000
Exemption = ₹1,25,000
Taxable Gain = ₹75,000
Tax = 12.5% of ₹75,000 = **₹9,375**
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### 🔹 Example 2: STCG on Shares
* Purchase Price = ₹1,00,000
* Sale Price = ₹1,50,000
* Gain = ₹50,000
Tax = 20% of ₹50,000 = **₹10,000**
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### 🔹 Example 3: Property Sale (LTCG)
* Purchase Price = ₹20,00,000
* Sale Price = ₹30,00,000
* Gain = ₹10,00,000
👉 Option 1: 12.5% without indexation
Tax = ₹1,25,000
👉 Option 2 (if eligible): 20% with indexation
(Depends on inflation-adjusted cost)
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## 7. Impact of Budget 2024 Changes
### ✔ Positive
* Simpler tax structure
* Higher exemption (₹1.25 lakh)
* Uniform rates across assets
### ❌ Negative
* Removal of indexation increases tax burden
* Higher STCG discourages short-term trading
* Real estate investors may pay more tax
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## 8. Conclusion
Budget 2024 has **reshaped capital gains taxation in India** by introducing a **simplified but slightly higher tax regime**.
* **LTCG → 12.5% (flat)**
* **STCG → 20% (equity)**
* **Indexation mostly removed**
Investors should now focus more on **long-term investing and tax planning** to reduce tax liability.